Managerial Accounting Problem

Prepare a Report Showing Revenue and Spending Variances MRS Enterprises owns and operates a large automatic car wash facility in Royal Oak. The following table provides data concerning the companys costs:

	Fixed Cost per Month	Cost per Car Washed
Cleaning supplies		$0.70
Electricity	$1,100	$0.08
Maintenance		$0.30
Wages and salaries	$4,700	$0.40
Depreciation	$8,200
Rent	$2,000
Administrative expenses	$1,300	$0.05

For example, electricity costs are $1,100 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.70 per car washed. The actual operating results for August are as follows:

Income Statement: Month Ended August 31

Actual cars washed.	8,400
Revenue	$57,710
Expenses:
Cleaning supplies	6,310
Electricity	1,734
Maintenance	2,730
Wages and salaries	8,380
Depreciation	8,200
Rent	2,200
Administrative expenses	1,615
Total expense	31,169
Net operating income	$26,541

Requirements:

1) Use excel and show work, identify how answers were found.

2) Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)